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On December 11th, the U.S. Trade Representative (USTR) announced the U.S. dollar values of the thresholds that will apply in 2018 and 2019 to U.S. federal and state procurement covered by the WTO Government Procurement Agreement (GPA) and free trade agreements (FTAs). Thresholds are a key element in determining whether procurement is covered by a trade agreement. U.S. procurement valued at or above specified thresholds must be conducted in accordance with the agreements. This post outlines the new thresholds that apply under the GPA and FTAs and contrasts them with the 2016-17 thresholds. It also notes the thresholds for which the U.S. dollar value is never adjusted.

Every two years USTR, pursuant to Executive Order 12260, determines the U.S. dollar value of thresholds in accordance with formula specified in the GPA and FTAs. The most recent USTR threshold determination was published in the Federal Register (82 Fed. Reg. 58248). USTR will submit notifications of its adjusted thresholds to the WTO procurement committee and to its FTA counterparts. The other parties to the GPA and FTAs will make similar adjustments to reflect the thresholds in their local currencies.

Central/federal government entities will apply the following adjusted thresholds in procurement of goods and services:

$80,317 threshold for procurement under the U.S. Australia-FTA, U.S.-Chile FTA, U.S. Colombia FTA, Dominican Republic-Central American FTA (DR-CAFTA), U.S.-Singapore FTA and the North American Free Trade Agreement (NAFTA), except goods from Canada. (The comparable value for 2016-17 was slightly lower at $77,533.)

Three central government thresholds are never adjusted: a $25,000 threshold in NAFTA that only applies to goods procurement with Canada; a $50,000 threshold that applies to goods covered by the U.S.-Israel FTA; and a $100,000 threshold that applies to both goods and services under the U.S.-Korea FTA.

Sub-central government entities: An adjusted threshold of $492,000 applies to the procurement of goods and services under the GPA and FTAs that cover state procurement (Australia FTA, Chile FTA, Colombia FTA, DR-CAFTA, Morocco FTA, Panama FTA, Peru FTA and Singapore FTA). (For 2016-17, the threshold value was higher at $522,000).

Other government entities are subject to the following thresholds for procurement of goods and services:

A $401,584 threshold applies to NAFTA and List A Entities in most other FTAs.

A $250,000 threshold, which is not adjusted, applies to U.S. federal government enterprises such as the Tennessee Valley Authority and Bonneville and other Power Administrations that are covered under the GPA and most FTAs.

Construction services: The following thresholds apply in the procurement of construction services.

A $6,932,000 threshold applies to all entities covered under the GPA and all but three FTAs. (This represents a decline from the 2016-17 threshold value of $7,358,000.)

NAFTA and the Bahrain and Oman FTAs apply two thresholds for construction services: a $10,441,216 threshold to constructions purchased by central government entities and a $12,851,327 threshold for other government entities.

The new threshold values will apply from January 1, 2018 through December 31, 2019. The threshold values for federal government entities are set out in the Federal Acquisition Regulation (FAR Part 25.402).